This situation cannot continue without adjustment.

"Borrowed money in accounts at 61 New York Stock Exchange firms has fallen 4.6 percent, the biggest drop since June 2010, according to a July 22 statement from New York-based NYSE Euronext (NYX)."

Put in perspective, the decline is slight compared to the 36 percent expansion in the prior eight months, the largest since 2007.

4. Main Street is Still Deleveraging

And speaking of deleveraging, the Fed's quarterly report on household debt and credit markets showed continued decline in balances on most consumer loan types. Mortgage and home equity lines of credit both fell by $20 billion. Non-real estate levels of debt fell by $10 billion, down nearly 10 percent from their fourth quarter of 2008 peak.

"This is more evidence that the pace of consumer deleveraging that began in late 2008 has slowed," said Andrew Haughwout, vice president in the Research and Statistics Group at the New York Fed. Or that consumers are increasingly turning to credit to manage daily expenses, depending on from which group's perspective you are viewing the data.

5. Corporations Are People...

Late last week GOP presidential hopeful Mitt Romney had a "conversation" on the Iowa campaign trail with a demonstrator calling for an increase in corporate taxes, a position to which Romney adamantly is opposed. Video of the event shows Romney saying "Corporations are people, my friend," an assertion perfectly ripe for late night mockery. Except, as Roberton Williams points out on the Tax Policy Center TaxVox blog, it's true. The real question is, just what kind of people are corporations?

"The corporation is the conduit but the burden of the tax falls on individuals. The question is "On whom?"

There are four main possibilities: the owners of the corporation, owners of capital in general, workers, and consumers. A) The corporation's owners could get a smaller return on their investment if the tax reduces profits. B) All owners of capital could suffer if the tax induces a reallocation of investment toward less profitable but untaxed endeavors, thus reducing the after-tax return to all affected capital. C) Workers could receive less pay if the tax causes investment to move away from the firms that employ them, leaving them less productive than they would otherwise be. D) Consumers could pay more for the firm's products if reduced output pushes prices up. Most likely the answer is E) All of the above."

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